Trustee roles should remain voluntary, but more must be done to improve skills and diversity, a House of Lords report into the future of charity has said.

The House of Lords Select Committee on Charities was set up to study the sustainability of the charity sector. Its final report is published today (26 March).

In its report, Stronger Charities for a Stronger Society, the committee said the government should consult on statutory time off work to be a trustee, and said charities must ensure trustees receive expenses.

The committee said in its report that the “voluntary principle of trusteeship is an important one and that trustees should not receive payment for undertaking the role”.

Some pieces of evidence had suggested that making it easier to pay trustees would be one way to attract more people to the role.

The committee acknowledged that there might be “highly exceptional circumstances, where people are otherwise unable to act as a trustee, it may be acceptable to consider some form of remuneration”.

The report said that the explanation and justification for such arrangements must be set out in the charity’s annual report. It continued that more broadly, trustees “should be able to claim relevant expenses to ensure that financial considerations do not unduly deter people from taking up the role”.

The committee included Lord Hodgson of Astley Abbotts, who in 2012 published a review of the Charities Act: Trusted and Independent: Giving charity back to charities. The committee nonetheless disagreed with Lord Hodgson's report, which had said that charities should have more flexibility when it comes to “ex gratia payments”, and that it should be acceptable to pay trustees at larger charities.

The House of Lords also recommended that that the government takes fresh measures to get more senior business leaders directly involved with charities to foster those relationships and maximise their value.

Improve trustee diversity

The report said more can be done by government, the Charity Commission, infrastructure bodies and charities themselves to promote trusteeship and incentivise people to become trustees. it said there was much “greater scope to enable disadvantaged people to become trustees and thus improve diversity”.

It said the peers believe that trustee diversity is important, as boards with a range of skills, experiences, ages and backgrounds are likely to lead to better governance.

The report recommends that the Office for Civil Society works with other departments and business leaders to develop a new initiative to promote trusteeship to employees and employers and thereby encourage greater participation and diversity.

Time off work to be a trustee

The committee called on the government to hold a public consultation on introducing a statutory duty for larger employers to give staff "limited time off work to perform trustee roles".

This would give trusteeship the same status as being a magistrate or school governor and was suggested by NCVO during evidence. NCVO believe this would make it easier for small and medium sized charities to attract trustees with the right skills.

Sir Stuart Etherington, chief executive of NCVO, said: "Putting trusteeship on a footing with other public duties by ensuring employers had to make allowances for trustees, as they would for school governors or magistrates, would raise its profile and help broaden the range of people able to contribute by volunteering as a trustee."

Access to training

The report also said that current trustee training is disproportionately London-based. It said that training and development are essential for charity trustees “in order for the sector to work effectively”.

The report recommended that the sector’s infrastructure bodies “review the training opportunities that exist, identify where there may be shortcomings in provision, particularly for small charities, and take action to address them”.

It said that they could assist charities by publishing collated information about available training and providing a platform for users to rate the value of courses they have accessed.

Mergers ‘not a sign of failure’

The duplication of work by charities was raised as an issue, with some of those giving evidence to the committee saying mergers and collaborations should be considered more frequently. The Lords report said that mergers can “often be considered a measure of success and maturity, and a reflection of a charity keeping a proper focus on its beneficiaries”.

It said that staff, trustees and volunteers should reflect upon the possibilities for mergers, and consult with their beneficiaries where opportunities may exist. It stressed that mergers “should not be seen as a sign of failure”.

It continued to say that it would be easier to avoid overlapping work in the charity sector by discouraging charities with similar purposes from being established where existing charities in the same field are working well and delivering for their beneficiaries. However, the report said that the House of Lords would “not want to discourage people from establishing new charities, which could be the effect of such a system”.

It added that the Commission currently has neither the structure nor the financial capacity to carry out this work.

The report said it welcomed work done by the Law Commission on this to address some of the legal and technical barriers to charities looking to merge, and recommends that the government brings forward the Bill at the earliest opportunity.

It added that the Commission should consider what support and guidance it can offer to charities seeking to merge.

The report also recommend that the Charity Commission include options for time-limited structures in the model governing documents that they produce for charities, as such clauses would prompt new charities to consider their lifespan from their inception. It said that time-limited structures are a good option for ensuring that small charities such as memorial foundations are able to dissolve when they have delivered on their charitable objectives.

All charities should have a website

Peers said they heard a lot about the potential for digital technologies to improve charities’ accountability and transparency. It said that this is “essential for charities to ensure they function properly, deliver for their beneficiaries and retain the trust of the public”.

It said: “In order to respond to the greater expectations upon them, charities need to operate with a presumption of openness.”

One recommendation from the Lords was the need for a website or social media page. It said: “We believe that it is important for all but the very smallest charities to have a simple website or public social media page to provide that transparency.”

Not embracing technology ‘a risk’

Speaking on this subject, the report said that the capacity of the charity sector to embrace digital technology varies considerably, and “while some are at the cutting edge of the use of technology, others risk organisational stagnation and decay by not embracing it successfully”. It says that this is a risk to the charity sector.

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The report said that charities should “actively consider including a digital trustee role on their boards”, adding “we note the potential benefits to board diversity that would be likely to result from adopting such an approach”.

It recommended that “infrastructure bodies share knowledge and best practice on innovation and digitisation across the sector and coordinate training opportunities, at minimal cost, for charities with limited digital experience”. It said that the Big Lottery Fund could provide support to enable this.

The report said that the technology sector needs to work to ensure that charities can develop the skills and capacity to fully engage with the digital realm, and that this “may include the more widespread promotion of training and development opportunities, particularly to smaller charities with limited experience of digital engagement”.

Civil Society Media provides a number of training courses designed to help improve governance in the charity sector. For more information click here.